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H&W in the Media

8 Tips for Surviving the Stock Market’s Record Drop

published: Aug. 26, 2015

Wall Street’s historic plunge – in which the Dow Jones industrial average plummeted 1,000 points Monday before “bouncing back” to a 588-point loss – appeared to subside Tuesday, as the Dow and Standard & Poor’s 500 index jumped 3.4 percent Tuesday morning. Call it an interest rate chill pill, as the People’s Bank of China cut interest rates for the fifth time in nine months, while investors held out hope that the Federal Reserve might hit the brakes on an interest rate hike.

“It happened so fast and was so powerful that no one could’ve predicted it even a week ago,” says Jay Sukits, a clinical assistant professor of business administration at the University of Pittsburgh’s Katz Graduate School of Business. “But the worst thing you can do is panic: to sell right at the bottom the market.” Got that? Don’t panic. Instead, buckle down and follow the advice of these investment experts, who offer eight tips for making it through Wall Street’s current woes.

Scoop up the deals. Keep in mind that China’s troubles can’t possibly derail strong economic indicators in the U.S., from improving job numbers to a robust real estate market. “The correction is a good thing for those who are now able to afford Apple (ticker: AAPL), Tesla (TSLA), Netflix (NFLX) and Amazon (AMZN),” says Todd Antonelli, managing director of Berkeley Research Group in Chicago. “We forget what goes up must come down. And this creates opportunity for all.” Apple, for example, was up almost 17 percent between Monday’s open and Tuesday’s open.

Diversify now. No one knows for sure whether this is a temporary correction, as markets always defy logic. Are we in a spell of irrational anxiety?

Regardless, it’s crucial to build and manage a diversified growth portfolio, says Kevin Mahn, president and chief investment officer of Hennion & Walsh Asset Management in Parsippany, New Jersey. “That includes asset classes and sectors of the market not perfectly correlated with U.S. large-cap stocks. This is critical in the days and months ahead.”